Hi all
Have you thought about using the Property Management Co. to find you the tenant. Usually around 2 weeks letting fee.
Then manage it the rest of the time yourself. I am considering this.
Cheers
SGLife should NOT be a journey to the grave with the intention of arriving safely in an attractive and well preserved body, but rather to skid in sideways Beer in one hand – Pizza in the other, body thoroughly used up, totally worn out, and screaming WOO HOO!”
Hi All,
Personally, you should go to a property manager you really like, but go to their principal. Explain that your not happy with all the added charges, and you want to pay a flat fee.
Tell them that they have more to gain as their rent roll will be worth more, and you can only speak about this to the principal, as the property manager is not going to give a rats a$$, but the prinicpal will. If they still refuse, keep trying until you find a prinicpal that does. Theyre silly if they dont!
I wish i was in WA, because I charge a flat fee, there are definately no added charges! I’d make a killing offering a flat fee there! HeeheeheeGood luck, and as suggested before, last ditch effort, just use a PM to let the property out. Its about two weeks rent, and then manage it yourself. If the PM has done a good job in the first place, there shouldnt be too much work for you to do!
Thanks so much for all the advice! This is a brilliant forum for new investors like me.
I ended up narrowing it down to 2 PMs in the local area that charged less than 9.35% management fee. The cheaper one (8.6% fee inc GST) sent me out a contract and crossed out additional fees and wrote a cheaper price for them all. I decided not to go with him for one reason, his manner over the phone. He cut me off a few times and seemed to like the sound of his own voice.
I have a meeting with the other one tomorrow on site. She charges 8.8% inc GST and is roughly $5 – $10 more expensive for additional charges. They have 0% vacancy rate and the woman was so friendly and professional over the phone, that I have a good feeling she will look after us. They are a small business too, so I’m confident we wont get treated like just another number.
I’ve given up on the flat fee because most REAs want to charge 15 – 16% – might as well buy a DHA house for that
[puke]Can anyone confirm that if you let the REA arrange everything from carpet cleaning to key cutting (billed to your monthly account), you can still claim it back as a tax deduction easily?
Also, we are negatively geared and the property is in both of our names (with my mum as garaunteer), but I’m not earning a wage. I spoke to an accountant who explained that come tax time, half of the loss needs to be debited from my wage which doesn’t exist. Does anyone know how to get the mortgage in my husband’s name? Would it be after we build enough equity, refinance and get mum out of the picture? [stun]Dee dee, your scenario sounds more complicated than the initial thread first intended.
Expenses on maintaining IP should be tax deductible if you can substantiate them with good record keeping. Some can be written off in the year it is incurred, some should be depreciated over a number of years. Speak again with your accountant.
As for changing name on mortgage, you need to check with your finance provider. It should be straight forward if they come to the party.
There may be a need to change the title on the property as well. It is an off market transfer using appropriate forms (Transfer of Land) with the Office of State Revenue and may be the Land Title Office for stamping.
Advice from the expert is necessary before you proceed. I think if you ask terryw nicely, he may be able to give pointers in this area.
CT
I’m a complicated girl ctaing [stitch]
Thanks for the advice. The accountant doesn’t think there is much point in doing a depreciation schedule because the house was built in the 70’s (and not renovated since then – psychadelic rooms). The only new things it will have are a gas cooker ($610) and a security screen with sliding door ($1630 after tenant moves in).
My husband earns a good wage, so it is a shame I didn’t forsee tax benefits.
I will seek out Terryw and enquire further with my lending institution.Hi there Dee Dee,
First of all congrats on your 1st IP.I personally would aleays get a manager, pay the fee now, will save you a headache and more fees later,
I think thatyou 8.8% fee is alittle high, being from Perth also, I pay 7.5%, and because I have good tennent, and it is an investment I have requested inspections, only every 6 months, this save some, bucks,
also, with every investproperty, its an “analytical game not emotional” so you remain in control, and if you are not happy with your agreement, seek another agent, it does pay to shop around.I hope i have helped?
also, how did you find your Perth Buyers agent? honest enough?
Jason.JASE
Thanks for your thoughts meakinmaster60, you guys offer great help!
I will remember to keep a cool head regarding PMs.
The buyer agent was fantastic. Very smooth transition from dream to reality and they were always available for queries. I would recommend them to anyone interested in using one. I also used a fantastic mortgage broker. The only point where I hit a snag was with the settlement agent & bank. Countless losing of documents by bank and settlement agent late with payments to everyone! Next time I will use a bank for settlement because they are much cheaper than Settlement agents.
Reno’s completed yesterday, looks great, and should now be able to get $220/week instead of $180 when it was in original condition. Still a big gap between rent and mortgage, but perhaps we can find something with a smaller ratio next time. At least our foot is in the door and hopefully in 20 years time the negative gearing on the property wont be an issue.I disagree with your accountant on the depreciation. One of my properties was built in 1971 and we still obtain very good depreciation on the fixtures. Its only a nedium size 3 x 1home. No building depreciation though.
Contact Depro and for about $400 you will be pleasantly surprised how much you can claim. You can also back claim if you have held the property for a number of years and you have not claimed depreciation before in your tax return.
I think negotiating a flat fee for managing a property is a matter of suck it and see. (And submitting an offer)
I owned a small (2 flats) property in Newcastle a few years back, The goiing rate then was 7%. I approached an agent I knew, whose rate I knew to be 5%. Very tongue in cheek I said to my lady salesperson there–“How about a 3% flat fee if I give you guys this property to manage?”
She said she’d ask her boss.
I was amazed when next day she said “the boss says you’ve got a deal”
Which goes to show that everything in business is negotiable!my inspections are part of the service.
mine charge 7-8%? of income,
advertising is free, letting fee is just 1 weeks rent.
also they charge postage fortnightly of @.50, (which is one letter, 1 stamp and 1 evelopeHi Dee
From my experience one property is not very negotiable, but you can still try to negotiate with the agent on the fees such as 8% total including all fees, not 8% plus fees.PS: May I ask why you have invested in a negative geared property?
Dee also
Well it just worked out that way because the surroundings have some desirable redeming features which I am confident will increase the property’s value over time and it was reasonably priced. I would have loved something that was the best of both worlds and I look forward to spotting them in the future.
I will outline for you my deal with the property manager inc GST(local);Management fee: 8.8%
Postage & Petties: $6.60/m
Tenant checks: $2.20/person enquiry
Property Inspections: $44.00/quater
Property Condition Report: $110.00 (once only)
Bond Inspection: $55.00
Letting fee: 1 week rent for us, 1 week rent for tenant
Advertising: $17.80 – single line ad, $26.66 ad with photo, $16.50 internet
Title search: $16.50
Roll of photos: $22.00
Digi photos: Free
Court attendance: $77.00 (max)
Annual Summary: $22.00No doubt there will be a few raised eyebrows, but I can honestly say that I REALLY shopped around and compiled a spreadsheet to compare everyones costs. As mentioned, it is not until I have about 3 that I can start negotiating a flat fee that isn’t a complete insult to me. For now however, they are keeping me informed and have sent my first monthly statement with reciepts – how exciting! I’m sure I won’t be such a loser in a few months when the honeymoon is over [hmmm]
Just skimmed through this thread, but 8.8% + extra costs is a lot.
I pay 5.5% (inc. GST) and 2 weeks rent is the letting fee for new tenants. Advertising is free (internet sites X 4). Also $3.25 per month for rental statement. That’s basically it. Inspections/condition reports free.
GSJ
Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser
Just skimmed through this thread, but 8.8% + extra costs is a lot.
I pay 5.5% (inc. GST) and 2 weeks rent is the letting fee for new tenants. Advertising is free (internet sites X 4). Also $3.25 per month for rental statement. That’s basically it. Inspections/condition reports free.
GSJ
Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser
Hi
It looks like I have struck it lucky a my agent agreed to 5% and that seems to be the sydney eastern suburbs rateHas anyone tried to negiotate .
malcolm
malc
Yeah!…..The reality is; you have to be just as “Hard nosed” as the agents are in negotiating what you want……Don’t be afraid, remember to use the fact that there are a few of them around!….So turn this to your advantage!……They do Compete….Just play them a little & always leave the door open so you can get back to then!…It’s fun actually!!
My prop man fees are 7%. These should never increase their %age, as the rents increase, so will their $s earned. Had one once that suggested they would like to raise their man fees by 1/2 a percentage point, as costs and CPI are affecting business. RIGHT!
Pull the other one, it has bells on!
Anyway, usually at the beginning of the property manging arrangement, I have a look through their contract offered, and just put a black pen line through anything I dont like, and then pen in next to it, what I’d like. actual examples are….reletting fee+1 weeksrent. I crossed that out and wrote next to it 1/2 a weeks rent. Another section said =8% man fee. I crossed that out and wrote 7%. I adjusted a few other things as well & sent it back to them. As long as its reasonable, I have never had that type of negotiation knocked back. If they dont like it I will find a managing agent who will. My $, my terms[party]Property rental
Renting out your property – an owners guide is now available. This publication contains the Tenancy notes as well as other information which will assist private landlords in the management of their rental properties.
Dee Dee, Here is some info from Department of Consumer and Employment Protection for rental properties in WA. You used to be able to purchase Landlords Handbook from newagencies but now it is free. Website http://www.docep.wa.gov.auYou can request a copy of Renting out your property – an owners guide to be sent to you by calling 1300 30 40 54.
Bond Administration – A Guide (85kb PDF)
Renting a home in Western Australia – A Tenant’s Guide [PDF 639kb]
Renting out your property: An owner’s guide (600kb PDF)
Information relating to the changes to the residential tenancies regulations 1989I’ve managed my 2 properties in Asfield and Eden Hill for 3 and 2 yrs. I thought of using a property manager but found choosing a pm to be as much work as finding a tenant. I am thinking about becoming a pm, after doing the courses and starting a business to manage my partners properties, reduce his tax, and earn a small income. Anyone need a new PM in WA?
Did you have many suitable applicants for your property?
With your PM are you able to carry out some of the work yourself eg. property inspections to save money, photos?P.S. I was joking about, “Does anyone want a new PM?” Looking after our 2 properties is enough for me right now.
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